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Senate Engrossed State of Arizona Senate Fifty-second Legislature First Regular Session 2015

SENATE BILL 1476

AN ACT

AMENDING SECTIONS 15-185, 15-189, 15-393 AND 15-901, ARIZONA REVISED STATUTES; REPEALING SECTION 15-917, ARIZONA REVISED STATUTES; AMENDING SECTIONS 15-945, 15-972 AND 15-2002, ARIZONA REVISED STATUTES; AMENDING TITLE 15, CHAPTER 16, ARTICLE 5, ARIZONA REVISED STATUTES, BY ADDING SECTION 15-2042; MAKING APPROPRIATIONS; RELATING TO KINDERGARTEN THROUGH GRADE TWELVE BUDGET RECONCILIATION.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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Be it enacted by the Legislature of the State of Arizona: 1 Section 1. Section 15-185, Arizona Revised Statutes, is amended to 2

read: 3 15-185. Charter schools; financing; civil penalty; 4

transportation; definition 5 A. Financial provisions for a charter school that is sponsored by a 6

school district governing board are as follows: 7 1. The charter school shall be included in the district's budget and 8

financial assistance calculations pursuant to paragraph 3 of this subsection 9 and chapter 9 of this title, except for chapter 9, article 4 of this title. 10 The charter of the charter school shall include a description of the methods 11 of funding the charter school by the school district. The school district 12 shall send a copy of the charter and application, including a description of 13 how the school district plans to fund the school, to the state board of 14 education before the start of the first fiscal year of operation of the 15 charter school. The charter or application shall include an estimate of the 16 student count for the charter school for its first fiscal year of operation. 17 This estimate shall be computed pursuant to the requirements of paragraph 3 18 of this subsection. 19

2. A school district is not financially responsible for any charter 20 school that is sponsored by the state board of education, the state board for 21 charter schools, a university under the jurisdiction of the Arizona board of 22 regents, a community college district or a group of community college 23 districts. 24

3. A school district that sponsors a charter school may: 25 (a) Increase its student count as provided in subsection B, paragraph 26

2 of this section during the first year of the charter school's operation to 27 include those charter school pupils who were not previously enrolled in the 28 school district. A charter school sponsored by a school district governing 29 board is eligible for the charter additional assistance prescribed in 30 subsection B, paragraph 4 of this section. The district additional 31 assistance allocation as provided in section 15-961 for the school district 32 sponsoring the charter school shall be increased by the amount of the charter 33 additional assistance. The school district shall include the full amount of 34 the charter additional assistance in the funding provided to the charter 35 school. 36

(b) Compute separate weighted student counts pursuant to section 37 15-943, paragraph 2, subdivision (a) for its noncharter school versus charter 38 school pupils in order to maintain eligibility for small school district 39 support level weights authorized in section 15-943, paragraph 1 for its 40 noncharter school pupils only. The portion of a district's student count 41 that is attributable to charter school pupils is not eligible for small 42 school district support level weights. 43

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4. If a school district uses the provisions of paragraph 3 of this 1 subsection, the school district is not eligible to include those pupils in 2 its student count for the purposes of computing an increase in its revenue 3 control limit and district support level as provided in section 15-948. 4

5. A school district that sponsors a charter school is not eligible to 5 include the charter school pupils in its student count for the purpose of 6 computing an increase in its district additional assistance as provided in 7 section 15-961, subsection B, except that if the charter school was 8 previously a school in the district, the district may include in its student 9 count any charter school pupils who were enrolled in the school district in 10 the prior year. 11

6. A school district that sponsors a charter school is not eligible to 12 include the charter school pupils in its student count for the purpose of 13 computing the revenue control limit which is used to determine the maximum 14 budget increase as provided in chapter 4, article 4 of this title unless the 15 charter school is located within the boundaries of the school district. 16

7. If a school district converts one or more of its district public 17 schools to a charter school and receives assistance as prescribed in 18 subsection B, paragraph 4 of this section, and subsequently converts the 19 charter school back to a district public school, the school district shall 20 repay the state the total charter additional assistance received for the 21 charter school for all years that the charter school was in operation. The 22 repayment shall be in one lump sum and shall be reduced from the school 23 district's current year equalization assistance. The school district's 24 general budget limit shall be reduced by the same lump sum amount in the 25 current year. 26

B. Financial provisions for a charter school that is sponsored by the 27 state board of education, the state board for charter schools, a university, 28 a community college district or a group of community college districts are as 29 follows: 30

1. The charter school shall calculate a base support level as 31 prescribed in section 15-943, except that: 32

(a) Section 15-941 does not apply to these charter schools. 33 (b) THE SMALL SCHOOL WEIGHTS PRESCRIBED IN SECTION 15-943, PARAGRAPH 1 34

APPLY IF A CHARTER HOLDER, AS DEFINED IN SECTION 15-101, HOLDS ONE CHARTER 35 FOR ONE OR MORE SCHOOL SITES AND THE AVERAGE DAILY MEMBERSHIP FOR THE SCHOOL 36 SITES ARE COMBINED FOR THE CALCULATION OF THE SMALL SCHOOL WEIGHT. THE SMALL 37 SCHOOL WEIGHT SHALL NOT BE APPLIED INDIVIDUALLY TO A CHARTER HOLDER IF ONE OR 38 MORE OF THE FOLLOWING CONDITIONS EXISTS AND THE COMBINED AVERAGE DAILY 39 MEMBERSHIP DERIVED FROM THE FOLLOWING CONDITIONS IS GREATER THAN SIX HUNDRED: 40

(i) THE ORGANIZATIONAL STRUCTURE OR MANAGEMENT AGREEMENT OF THE 41 CHARTER HOLDER REQUIRES THE CHARTER HOLDER OR CHARTER SCHOOL TO CONTRACT WITH 42 A SPECIFIC MANAGEMENT COMPANY. 43

(ii) THE GOVERNING BODY OF THE CHARTER HOLDER HAS IDENTICAL MEMBERSHIP 44 TO ANOTHER CHARTER HOLDER IN THIS STATE. 45

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(iii) THE CHARTER HOLDER IS A SUBSIDIARY OF A CORPORATION THAT HAS 1 OTHER SUBSIDIARIES THAT ARE CHARTER HOLDERS IN THIS STATE. 2

(iv) THE CHARTER HOLDER HOLDS ONE OR MORE CHARTERS IN THIS STATE. 3 (c) NOTWITHSTANDING SUBDIVISION (b) OF THIS PARAGRAPH, FOR FISCAL YEAR 4

2015-2016 THE DEPARTMENT OF EDUCATION SHALL REDUCE BY THIRTY-THREE PERCENT 5 THE AMOUNT PROVIDED BY THE SMALL SCHOOL WEIGHT FOR CHARTER SCHOOLS PRESCRIBED 6 IN SUBDIVISION (b) OF THIS PARAGRAPH. 7

(d) NOTWITHSTANDING SUBDIVISION (b) OF THIS PARAGRAPH, FOR FISCAL YEAR 8 2016-2017 THE DEPARTMENT OF EDUCATION SHALL REDUCE BY SIXTY-SEVEN PERCENT THE 9 AMOUNT PROVIDED BY THE SMALL SCHOOL WEIGHT FOR AFFILIATED CHARTER SCHOOLS 10 PRESCRIBED IN SUBDIVISION (b) OF THIS PARAGRAPH. 11

2. Notwithstanding paragraph 1 of this subsection, the student count 12 shall be determined initially using an estimated student count based on 13 actual registration of pupils before the beginning of the school year. 14 Notwithstanding section 15-1042, subsection F, student level data submitted 15 to the department may be used to determine estimated student counts. After 16 the first forty days, one hundred days or two hundred days in session, as 17 applicable, the charter school shall revise the student count to be equal to 18 the actual average daily membership, as defined in section 15-901, of the 19 charter school. Before the fortieth day, one hundredth day or two hundredth 20 day in session, as applicable, the state board of education, the state board 21 for charter schools, the sponsoring university, the sponsoring community 22 college district or the sponsoring group of community college districts may 23 require a charter school to report periodically regarding pupil enrollment 24 and attendance, and the department of education may revise its computation of 25 equalization assistance based on the report. A charter school shall revise 26 its student count, base support level and charter additional assistance 27 before May 15. A charter school that overestimated its student count shall 28 revise its budget before May 15. A charter school that underestimated its 29 student count may revise its budget before May 15. 30

3. A charter school may utilize section 15-855 for the purposes of 31 this section. The charter school and the department of education shall 32 prescribe procedures for determining average daily membership. 33

4. Equalization assistance for the charter school shall be determined 34 by adding the amount of the base support level and charter additional 35 assistance. The amount of the charter additional assistance is one thousand 36 seven hundred seven THIRTY-FOUR dollars seventy-seven NINETY-TWO cents per 37 student count in preschool programs for children with disabilities, 38 kindergarten programs and grades one through eight and one TWO thousand nine 39 hundred ninety TWENTY-TWO dollars thirty-eight TWO cents per student count in 40 grades nine through twelve. 41

5. The state board of education shall apportion state aid from the 42 appropriations made for such purposes to the state treasurer for disbursement 43 to the charter schools in each county in an amount as determined by this 44

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paragraph. The apportionments shall be made as prescribed in section 15-973, 1 subsection B. 2

6. The charter school shall not charge tuition for pupils who reside 3 in this state, levy taxes or issue bonds. A charter school may admit pupils 4 who are not residents of this state and shall charge tuition for those pupils 5 in the same manner prescribed in section 15-823. 6

7. Not later than noon on the day preceding each apportionment date 7 established by paragraph 5 of this subsection, the superintendent of public 8 instruction shall furnish to the state treasurer an abstract of the 9 apportionment and shall certify the apportionment to the department of 10 administration, which shall draw its warrant in favor of the charter schools 11 for the amount apportioned. 12

C. If a pupil is enrolled in both a charter school and a public school 13 that is not a charter school, the sum of the daily membership, which includes 14 enrollment as prescribed in section 15-901, subsection A, paragraph 1, 15 subdivisions (a) and (b) and daily attendance as prescribed in section 16 15-901, subsection A, paragraph 5, for that pupil in the school district and 17 the charter school shall not exceed 1.0. If a pupil is enrolled in both a 18 charter school and a public school that is not a charter school, the 19 department of education shall direct the average daily membership to the 20 school with the most recent enrollment date. On validation of actual 21 enrollment in both a charter school and a public school that is not a charter 22 school and if the sum of the daily membership or daily attendance for that 23 pupil is greater than 1.0, the sum shall be reduced to 1.0 and shall be 24 apportioned between the public school and the charter school based on the 25 percentage of total time that the pupil is enrolled or in attendance in the 26 public school and the charter school. The uniform system of financial 27 records shall include guidelines for the apportionment of the pupil 28 enrollment and attendance as provided in this section. 29

D. Charter schools are allowed to accept grants and gifts to 30 supplement their state funding, but it is not the intent of the charter 31 school law to require taxpayers to pay twice to educate the same pupils. The 32 base support level for a charter school or for a school district sponsoring a 33 charter school shall be reduced by an amount equal to the total amount of 34 monies received by a charter school from a federal or state agency if the 35 federal or state monies are intended for the basic maintenance and operations 36 of the school. The superintendent of public instruction shall estimate the 37 amount of the reduction for the budget year and shall revise the reduction to 38 reflect the actual amount before May 15 of the current year. If the 39 reduction results in a negative amount, the negative amount shall be used in 40 computing all budget limits and equalization assistance, except that: 41

1. Equalization assistance shall not be less than zero. 42 2. For a charter school sponsored by the state board of education, the 43

state board for charter schools, a university, a community college district 44

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or a group of community college districts, the total of the base support 1 level and the charter additional assistance shall not be less than zero. 2

3. For a charter school sponsored by a school district, the base 3 support level for the school district shall not be reduced by more than the 4 amount that the charter school increased the district's base support level 5 and district additional assistance allocation. 6

E. If a charter school was a district public school in the prior year 7 and is now being operated for or by the same school district and sponsored by 8 the state board of education, the state board for charter schools, a 9 university, a community college district, a group of community college 10 districts or a school district governing board, the reduction in subsection D 11 of this section applies. The reduction to the base support level of the 12 charter school or the sponsoring district of the charter school shall equal 13 the sum of the base support level and the charter additional assistance 14 received in the current year for those pupils who were enrolled in the 15 traditional public school in the prior year and are now enrolled in the 16 charter school in the current year. 17

F. Equalization assistance for charter schools shall be provided as a 18 single amount based on average daily membership without categorical 19 distinctions between maintenance and operations or capital. 20

G. At the request of a charter school, the county school 21 superintendent of the county where the charter school is located may provide 22 the same educational services to the charter school as prescribed in section 23 15-308, subsection A. The county school superintendent may charge a fee to 24 recover costs for providing educational services to charter schools. 25

H. If the sponsor of the charter school determines at a public meeting 26 that the charter school is not in compliance with federal law, with the laws 27 of this state or with its charter, the sponsor of a charter school may submit 28 a request to the department of education to withhold up to ten per cent 29 PERCENT of the monthly apportionment of state aid that would otherwise be due 30 the charter school. The department of education shall adjust the charter 31 school's apportionment accordingly. The sponsor shall provide written notice 32 to the charter school at least seventy-two hours before the meeting and shall 33 allow the charter school to respond to the allegations of noncompliance at 34 the meeting before the sponsor makes a final determination to notify the 35 department of education of noncompliance. The charter school shall submit a 36 corrective action plan to the sponsor on a date specified by the sponsor at 37 the meeting. The corrective action plan shall be designed to correct 38 deficiencies at the charter school and to ensure that the charter school 39 promptly returns to compliance. When the sponsor determines that the charter 40 school is in compliance, the department of education shall restore the full 41 amount of state aid payments to the charter school. 42

I. In addition to the withholding of state aid payments pursuant to 43 subsection H of this section, the sponsor of a charter school may impose a 44 civil penalty of one thousand dollars per occurrence if a charter school 45

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fails to comply with the fingerprinting requirements prescribed in section 1 15-183, subsection C or section 15-512. The sponsor of a charter school 2 shall not impose a civil penalty if it is the first time that a charter 3 school is out of compliance with the fingerprinting requirements and if the 4 charter school provides proof within forty-eight hours of written 5 notification that an application for the appropriate fingerprint check has 6 been received by the department of public safety. The sponsor of the charter 7 school shall obtain proof that the charter school has been notified, and the 8 notification shall identify the date of the deadline and shall be signed by 9 both parties. The sponsor of a charter school shall automatically impose a 10 civil penalty of one thousand dollars per occurrence if the sponsor 11 determines that the charter school subsequently violates the fingerprinting 12 requirements. Civil penalties pursuant to this subsection shall be assessed 13 by requesting the department of education to reduce the amount of state aid 14 that the charter school would otherwise receive by an amount equal to the 15 civil penalty. The amount of state aid withheld shall revert to the state 16 general fund at the end of the fiscal year. 17

J. A charter school may receive and spend monies distributed by the 18 department of education pursuant to section 42-5029, subsection E and section 19 37-521, subsection B. 20

K. If a school district transports or contracts to transport pupils to 21 the Arizona state schools for the deaf and the blind during any fiscal year, 22 the school district may transport or contract with a charter school to 23 transport sensory impaired pupils during that same fiscal year to a charter 24 school if requested by the parent of the pupil and if the distance from the 25 pupil's place of actual residence within the school district to the charter 26 school is less than the distance from the pupil's place of actual residence 27 within the school district to the campus of the Arizona state schools for the 28 deaf and the blind. 29

L. Notwithstanding any other law, a university under the jurisdiction 30 of the Arizona board of regents, a community college district or a group of 31 community college districts shall not include any student in the student 32 count of the university, community college district or group of community 33 college districts for state funding purposes if that student is enrolled in 34 and attending a charter school sponsored by the university, community college 35 district or group of community college districts. 36

M. The governing body of a charter school shall transmit a copy of its 37 proposed budget or the summary of the proposed budget and a notice of the 38 public hearing to the department of education for posting on the department 39 of education's website no later than ten days before the hearing and meeting. 40 If the charter school maintains a website, the charter school governing body 41 shall post on its website a copy of its proposed budget or the summary of the 42 proposed budget and a notice of the public hearing. 43

N. The governing body of a charter school shall collaborate with the 44 private organization that is approved by the state board of education 45

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pursuant to section 15-792.02 to provide approved board examination systems 1 for the charter school. 2

O. If permitted by federal law, a charter school may opt out of 3 federal grant opportunities if the charter holder or the appropriate 4 governing body of the charter school determines that the federal requirements 5 impose unduly burdensome reporting requirements. 6

P. For the purposes of this section: 7 1. "Monies intended for the basic maintenance and operations of the 8

school" means monies intended to provide support for the educational program 9 of the school, except that it does not include supplemental assistance for a 10 specific purpose or title VIII of the elementary and secondary education act 11 of 1965 monies. The auditor general shall determine which federal or state 12 monies meet the definition in this paragraph. 13

2. "Operated for or by the same school district" means the charter 14 school is either governed by the same district governing board or operated by 15 the district in the same manner as other traditional schools in the district 16 or is operated by an independent party that has a contract with the school 17 district. The auditor general and the department of education shall 18 determine which charter schools meet the definition in this subsection. 19

Sec. 2. Section 15-189, Arizona Revised Statutes, is amended to read: 20 15-189. Charter schools; vacant buildings; list; used equipment 21 A. The department of education SCHOOL FACILITIES BOARD, in conjunction 22

with the department of administration, shall annually publish a list of 23 vacant and unused buildings and vacant and unused portions of buildings that 24 are owned by this state or by school districts in this state and that may be 25 suitable for the operation of a charter school. The department of education 26 SCHOOL FACILITIES BOARD shall make the list available to applicants for 27 charter schools and to existing charter schools. The list shall include the 28 address of each building, a short description of the building, and the name 29 of the owner of the building AND ANY OTHER PERTINENT INFORMATION RELATED TO 30 THE VACANCY OF THE BUILDING. THE SCHOOL FACILITIES BOARD SHALL ANNUALLY 31 SUBMIT THE LIST TO THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER 32 OF THE HOUSE OF REPRESENTATIVES AND PROVIDE A COPY OF THE LIST TO THE 33 SECRETARY OF STATE. Nothing in this section requires the owner of a building 34 on the list to sell or lease the building or a portion of the building to a 35 charter school or to any other school or to any other prospective buyer or 36 tenant. 37

B. A school district may sell used equipment to a charter school 38 before the school district attempts to sell or dispose of the equipment by 39 other means. 40

Sec. 3. Section 15-393, Arizona Revised Statutes, is amended to read: 41 15-393. Joint technical education district governing board; 42

report; definitions 43 A. The management and control of the joint district are vested in the 44

joint technical education district governing board, including the content and 45

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quality of the courses offered by the district, the quality of teachers who 1 provide instruction on behalf of the district, the salaries of teachers who 2 provide instruction on behalf of the district and the reimbursement of other 3 entities for the facilities used by the district. Unless the governing 4 boards of the school districts participating in the formation of the joint 5 district vote to implement an alternative election system as provided in 6 subsection B of this section, the joint board shall consist of five members 7 elected from five single member districts formed within the joint district. 8 The single member district election system shall be submitted as part of the 9 plan for the joint district pursuant to section 15-392 and shall be 10 established in the plan as follows: 11

1. The governing boards of the school districts participating in the 12 formation of the joint district shall define the boundaries of the single 13 member districts so that the single member districts are as nearly equal in 14 population as is practicable, except that if the joint district lies in part 15 in each of two or more counties, at least one single member district may be 16 entirely within each of the counties comprising the joint district if this 17 district design is consistent with the obligation to equalize the population 18 among single member districts. 19

2. The boundaries of each single member district shall follow election 20 precinct boundary lines, as far as practicable, in order to avoid further 21 segmentation of the precincts. 22

3. A person who is a registered voter of this state and who is a 23 resident of the single member district is eligible for election to the office 24 of joint board member from the single member district. The terms of office 25 of the members of the joint board shall be as prescribed in section 15-427, 26 subsection B. An employee of a joint technical education district or the 27 spouse of an employee shall not hold membership on a governing board of a 28 joint technical education district by which the employee is employed. A 29 member of one school district governing board or joint technical education 30 district governing board is ineligible to be a candidate for nomination or 31 election to or serve simultaneously as a member of any other governing board, 32 except that a member of a governing board may be a candidate for nomination 33 or election for any other governing board if the member is serving in the 34 last year of a term of office. A member of a governing board shall resign 35 the member's seat on the governing board before becoming a candidate for 36 nomination or election to the governing board of any other school district or 37 joint technical education district, unless the member of the governing board 38 is serving in the last year of a term of office. 39

4. Nominating petitions shall be signed by the number of qualified 40 electors of the single member district as provided in section 16-322. 41

B. The governing boards of the school districts participating in the 42 formation of the joint district may vote to implement any other alternative 43 election system for the election of joint district board members. If an 44 alternative election system is selected, it shall be submitted as part of the 45

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plan for the joint district pursuant to section 15-392, and the 1 implementation of the system shall be as approved by the United States 2 justice department. 3

C. The joint technical education district shall be subject to the 4 following provisions of this title: 5

1. Chapter 1, articles 1 through 6. 6 2. Sections 15-208, 15-210, 15-213 and 15-234. 7 3. Articles 2, 3 and 5 of this chapter. 8 4. Section 15-361. 9 5. Chapter 4, articles 1, 2 and 5. 10 6. Chapter 5, articles 1, 2 and 3. 11 7. Sections 15-701.01, 15-722, 15-723, 15-724, 15-727, 15-728, 15-729 12

and 15-730. 13 8. Chapter 7, article 5. 14 9. Chapter 8, articles 1, 3 and 4. 15 10. Sections 15-828 and 15-829. 16 11. Chapter 9, article 1, article 6, except for section 15-995, and 17

article 7. 18 12. Sections 15-941, 15-943.01, 15-948, 15-952, 15-953 and 15-973. 19 13. Sections 15-1101 and 15-1104. 20 14. Chapter 10, articles 2, 3, 4 and 8. 21 D. Notwithstanding subsection C of this section, the following apply 22

to a joint technical education district: 23 1. A joint district may issue bonds for the purposes specified in 24

section 15-1021 and in chapter 4, article 5 of this title to an amount in the 25 aggregate, including the existing indebtedness, not exceeding one per cent 26 PERCENT of the taxable property used for secondary tax purposes, as 27 determined pursuant to title 42, chapter 15, article 1, within the joint 28 technical education district as ascertained by the last property tax 29 assessment previous to issuing the bonds. 30

2. The number of governing board members for a joint district shall be 31 as prescribed in subsection A of this section. 32

3. The student count for the first year of operation of a joint 33 technical education district as provided in this article shall be determined 34 as follows: 35

(a) Determine the estimated student count for joint district classes 36 that will operate in the first year of operation. This estimate shall be 37 based on actual registration of pupils as of March 30 scheduled to attend 38 classes that will be operated by the joint district. The student count for 39 the district of residence of the pupils registered at the joint district 40 shall be adjusted. The adjustment shall cause the district of residence to 41 reduce the student count for the pupil to reflect the courses to be taken at 42 the joint district. The district of residence shall review and approve the 43 adjustment of its own student count as provided in this subdivision before 44

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the pupils from the school district can be added to the student count of the 1 joint district. 2

(b) The student count for the new joint district shall be the student 3 count as determined in subdivision (a) of this paragraph. 4

(c) For the first year of operation, the joint district shall revise 5 the student count to the actual average daily membership as prescribed in 6 section 15-901, subsection A, paragraph 1 for students attending classes in 7 the joint district. A joint district shall revise its student count, the 8 base support level as provided in section 15-943.02, the revenue control 9 limit as provided in section 15-944.01 and the district additional assistance 10 as provided in section 15-962.01 prior to May 15. A joint district that 11 overestimated its student count shall revise its budget prior to May 15. A 12 joint district that underestimated its student count may revise its budget 13 prior to May 15. 14

(d) After March 15 of the first year of operation, the district of 15 residence shall adjust its student count by reducing it to reflect the 16 courses actually taken at the joint district. The district of residence 17 shall revise its student count, the base support level as provided in section 18 15-943, the revenue control limit as provided in section 15-944 and the 19 district additional assistance as provided in section 15-962.01 prior to 20 May 15. A district that underestimated the student count for students 21 attending the joint district shall revise its budget prior to May 15. A 22 district that overestimated the student count for students attending the 23 joint district may revise its budget prior to May 15. 24

(e) A joint district for the first year of operation shall not be 25 eligible for adjustment pursuant to section 15-948. 26

(f) The procedures for implementing this paragraph shall be as 27 prescribed in the uniform system of financial records. 28

(g) Pupils in an approved joint technical education district 29 centralized program may generate an average daily membership of 1.0 during 30 any day of the week and at any time between July 1 and June 30 of each fiscal 31 year. 32 For the purposes of this paragraph, "district of residence" means the 33 district that included the pupil in its average daily membership for the year 34 before the first year of operation of the joint district and that would have 35 included the pupil in its student count for the purposes of computing its 36 base support level for the fiscal year of the first year of operation of the 37 joint district if the pupil had not enrolled in the joint district. 38

4. A student includes any person enrolled in the joint district 39 without regard to the person's age or high school graduation status, except 40 that: 41

(a) A student in a kindergarten program or in grades one through nine 42 who enrolls in courses offered by the joint technical education district 43 shall not be included in the joint district's student count or average daily 44 membership. 45

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(b) A student in a kindergarten program or in grades one through nine 1 who is enrolled in career and technical education courses shall not be funded 2 in whole or in part with monies provided by a joint technical education 3 district, except that a pupil in grade eight or nine may be funded with 4 monies generated by the five cent qualifying tax rate authorized in 5 subsection F of this section. 6

(c) A student who is over twenty-one years of age shall not be 7 included in the student count of the joint district for the purposes of 8 chapter 9, articles 3, 4 and 5 of this title. 9

5. A joint district may operate for more than one hundred eighty days 10 per year, with expanded hours of service. 11

6. A joint district may use the carryforward provisions of section 12 15-943.01. 13

7. A school district that is part of a joint district shall use any 14 monies received pursuant to this article to supplement and not supplant base 15 year career and technical education courses, and directly related equipment 16 and facilities, except that a school district that is part of a joint 17 technical education district and that has used monies received pursuant to 18 this article to supplant career and technical education courses that were 19 offered before the first year that the school district participated in the 20 joint district or the first year that the school district used monies 21 received pursuant to this article or that used the monies for purposes other 22 than for career and technical education courses shall use one hundred per 23 cent PERCENT of the monies received pursuant to this article to supplement 24 and not supplant base year career and technical education courses. 25

8. A joint technical education district shall use any monies received 26 pursuant to this article to enhance and not supplant career and technical 27 education courses and directly related equipment and facilities. 28

9. A joint technical education district or a school district that is 29 part of a joint district shall only include pupils in grades ten through 30 twelve in the calculation of student count or average daily membership if the 31 pupils are enrolled in courses that are approved jointly by the governing 32 board of the joint technical education district and each participating school 33 district for satellite courses taught within the participating school 34 district, or approved solely by the joint technical education district for 35 centrally located courses. Student count and average daily membership from 36 courses that are not part of an approved program for career and technical 37 education shall not be included in student count and average daily membership 38 of a joint technical education district. 39

E. The joint board shall appoint a superintendent as the executive 40 officer of the joint district. 41

F. Taxes may be levied for the support of the joint district as 42 prescribed in chapter 9, article 6 of this title, except that a joint 43 technical education district shall not levy a property tax pursuant to law 44 that exceeds five cents per one hundred dollars assessed valuation except for 45

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bond monies pursuant to subsection D, paragraph 1 of this section. Except 1 for the taxes levied pursuant to section 15-994, such taxes shall be obtained 2 from a levy of taxes on the taxable property used for secondary tax purposes. 3

G. The schools in the joint district are available to all persons who 4 reside in the joint district and to pupils whose district of residence within 5 this state is paying tuition on behalf of the pupils to a district of 6 attendance that is a member of the joint technical education district, 7 subject to the rules for admission prescribed by the joint board. 8

H. The joint board may collect tuition for adult students and the 9 attendance of pupils who are residents of school districts that are not 10 participating in the joint district pursuant to arrangements made between the 11 governing board of the district and the joint board. 12

I. The joint board may accept gifts, grants, federal monies, tuition 13 and other allocations of monies to erect, repair and equip buildings and for 14 the cost of operation of the schools of the joint district. 15

J. One member of the joint board shall be selected chairman. The 16 chairman shall be selected annually on a rotation basis from among the 17 participating school districts. The chairman of the joint board shall be a 18 voting member. 19

K. A joint board and a community college district may enter into 20 agreements for the provision of administrative, operational and educational 21 services and facilities. 22

L. Any agreement between the governing board of a joint technical 23 education district and another joint technical education district, a school 24 district, a charter school or a community college district shall be in the 25 form of an intergovernmental agreement or other written contract. The 26 auditor general shall modify the uniform system of financial records and 27 budget forms in accordance with this subsection. The intergovernmental 28 agreement or other written contract shall completely and accurately specify 29 each of the following: 30

1. The financial provisions of the intergovernmental agreement or 31 other written contract and the format for the billing of all services. 32

2. The accountability provisions of the intergovernmental agreement or 33 other written contract. 34

3. The responsibilities of each joint technical education district, 35 each school district, each charter school and each community college district 36 that is a party to the intergovernmental agreement or other written contract. 37

4. The type of instruction that will be provided under the 38 intergovernmental agreement or other written contract, including 39 individualized education programs pursuant to section 15-763. 40

5. The quality of the instruction that will be provided under the 41 intergovernmental agreement or other written contract. 42

6. The transportation services that will be provided under the 43 intergovernmental agreement or other written contract and the manner in which 44 transportation costs will be paid. 45

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7. The amount that the joint technical education district will 1 contribute to a course and the amount of support required by the school 2 district or the community college. 3

8. That the services provided by the joint technical education 4 district, the school district, the charter school or the community college 5 district be proportionally calculated in the cost of delivering the service. 6

9. That the payment for services shall not exceed the cost of the 7 services provided. 8

M. On or before December 31 of each year, each joint technical 9 education district shall submit a detailed report to the career and technical 10 education division of the department of education. The career and technical 11 education division of the department of education shall collect, summarize 12 and analyze the data submitted by the joint districts, shall submit an annual 13 report that summarizes the data submitted by the joint districts to the 14 governor, the speaker of the house of representatives, the president of the 15 senate and the state board of education and shall submit a copy of this 16 report to the secretary of state. The data submitted by each joint technical 17 education district shall include the following: 18

1. The average daily membership of the joint district. 19 2. The program listings and program descriptions of programs offered 20

by the joint district, including the course sequences for each program. 21 3. The costs associated with each program offered by the joint 22

district. 23 4. The completion rate for each program offered by the joint district. 24

For the purposes of this paragraph, "completion rate" means the completion 25 rate for students who are designated as concentrators in that program by the 26 department of education under the career and technology approved plan. 27

5. The graduation rate from the school district of residence of 28 students who have completed a program in the joint district. 29

6. A detailed description of the career opportunities available to 30 students after completion of the program offered by the joint district. 31

7. A detailed description of the career placement of students who have 32 completed the program offered by the joint district. 33

8. Any other data deemed necessary by the department of education to 34 carry out its duties under this subsection. 35

N. If the career and technical education division of the department of 36 education determines that a course does not meet the criteria for approval as 37 a joint technical education course, the governing board of the joint 38 technical education district may appeal this decision to the state board of 39 education acting as the state board of vocational education. 40

O. Notwithstanding any other law, the average daily membership for a 41 pupil who is enrolled in a joint technical education course defined in 42 section 15-391 and who does not meet the criteria specified in subsection Q 43 or R of this section shall be 0.25 for each course, except the sum of the 44

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average daily membership shall not exceed the limits prescribed by subsection 1 D, Q or R of this section, as applicable. 2

P. If a career and technical education course or program is provided 3 on a satellite campus, the sum of the average daily membership, as provided 4 in section 15-901, subsection A, paragraph 1, for that pupil in both the 5 school district and joint technical education district shall not exceed 1.25. 6 The school district and the joint district shall determine the apportionment 7 of the average daily membership for that pupil between the school district 8 and the joint district. A pupil who attends a course or program at a 9 satellite campus and who is not enrolled in the school district where the 10 satellite campus is located may generate the average daily membership 11 pursuant to this subsection if the pupil is enrolled in a school district 12 that is a member district in the same joint technical education district. 13

Q. The sum of the average daily membership of a pupil who is enrolled 14 in both the school district and joint technical education district course or 15 program provided at a community college pursuant to subsection K of this 16 section or at a centralized campus shall not exceed 1.75. The member school 17 district and the joint district shall determine the apportionment of the 18 average daily membership and student enrollment for that pupil between the 19 member school district and the joint district, except that the amount 20 apportioned shall not exceed 1.0 for either entity. Notwithstanding any 21 other law, the average daily membership for a pupil in grade ten, eleven or 22 twelve who is enrolled in a course that meets for at least one hundred fifty 23 minutes per class period at a centralized campus shall be 0.75. To qualify 24 for funding pursuant to this subsection, a centralized campus shall offer 25 programs and courses to all eligible students in each member district of the 26 joint technical education district. 27

R. The average daily membership for a pupil in grade ten, eleven or 28 twelve who is enrolled in a course that meets for at least one hundred fifty 29 minutes per class period at a leased centralized campus shall not exceed 30 0.75. The sum of the average daily membership, as provided in section 31 15-901, subsection A, paragraph 1, of a pupil who is enrolled in both the 32 school district and in joint technical education district courses provided at 33 a leased centralized campus shall not exceed 1.75 if all of the following 34 conditions are met: 35

1. The course qualifies as a joint technical education course as 36 defined in section 15-391. 37

2. The course is offered to all eligible students in each member 38 district of the joint technical education district and enrolls students from 39 multiple high schools. 40

3. The joint technical education district program in which the course 41 is included addresses a specific industry need and has been developed in 42 cooperation with that industry, or the leased facility is a state or federal 43 asset that would otherwise be unused or underutilized. 44

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4. The lease is established at fair market value if the lease is 1 executed for a facility located on the site of a member district and was 2 approved by the joint committee on capital review, except that a lease that 3 was executed or renewed before December 31, 2012 is not subject to approval 4 by the joint committee on capital review. The requirement prescribed in this 5 paragraph does not apply from and after December 31, 2016. 6

S. A student who is enrolled in an accommodation school as defined in 7 section 15-101 may be treated as a student of the school district in which 8 the student physically resides for the purposes of enrollment in a joint 9 technical education district and shall be included in the calculation of 10 average daily membership for either the joint technical education district or 11 the accommodation school, or both. 12

T. Notwithstanding any other law, beginning in fiscal year 2011-2012, 13 the student count for a joint technical education district shall be 14 equivalent to the joint technical education district's average daily 15 membership. 16

U. BEGINNING IN FISCAL YEAR 2016-2017, BASE SUPPORT LEVEL FUNDING THAT 17 A SCHOOL DISTRICT OR CHARTER SCHOOL RECEIVES FOR A PUPIL WHO IS ENROLLED IN 18 BOTH A SCHOOL DISTRICT OR CHARTER SCHOOL AND A JOINT TECHNICAL EDUCATION 19 DISTRICT SATELLITE CAMPUS PROGRAM SHALL BE FUNDED AT NINETY-TWO AND ONE-HALF 20 PERCENT OF THE BASE SUPPORT LEVEL FUNDING THAT THE SCHOOL DISTRICT OR CHARTER 21 SCHOOL WOULD OTHERWISE RECEIVE FOR THAT PUPIL. 22

V. BEGINNING IN FISCAL YEAR 2016-2017, BASE SUPPORT LEVEL FUNDING THAT 23 A JOINT TECHNICAL EDUCATION DISTRICT RECEIVES FOR A PUPIL WHO IS ENROLLED IN 24 BOTH A SCHOOL DISTRICT OR CHARTER SCHOOL AND A JOINT TECHNICAL EDUCATION 25 DISTRICT SHALL BE FUNDED AT NINETY-TWO AND ONE-HALF PERCENT OF THE BASE 26 SUPPORT LEVEL FUNDING THAT THE JOINT TECHNICAL EDUCATION DISTRICT WOULD 27 OTHERWISE RECEIVE FOR THAT PUPIL. 28

W. A SCHOOL DISTRICT MAY NOT PROHIBIT OR DISCOURAGE STUDENTS WHO ARE 29 ENROLLED IN THAT SCHOOL DISTRICT FROM ATTENDING COURSES OFFERED BY A JOINT 30 TECHNICAL EDUCATION DISTRICT. 31

X. NOTWITHSTANDING SUBSECTION D, PARAGRAPH 7 OF THIS SECTION, A SCHOOL 32 DISTRICT OR CHARTER SCHOOL THAT EXPERIENCES A REDUCTION IN ITS BASE SUPPORT 33 LEVEL FUNDING PURSUANT TO SUBSECTION U OF THIS SECTION MAY USE A PORTION OF 34 JOINT TECHNICAL EDUCATION DISTRICT MONIES THAT IT RECEIVES PURSUANT TO THIS 35 SECTION IN ORDER TO OFFSET THE LOSS OF REGULAR EDUCATION FUNDING THAT IT 36 EXPERIENCES PURSUANT TO SUBSECTION U OF THIS SECTION. THE AMOUNT OF JOINT 37 TECHNICAL EDUCATION MONIES THAT THE SCHOOL DISTRICT OR CHARTER SCHOOL MAY USE 38 TO OFFSET THE LOSS OF FUNDING THAT IT EXPERIENCES PURSUANT TO SUBSECTION U OF 39 THIS SECTION MAY NOT EXCEED THE REDUCTION IN BASE SUPPORT LEVEL FUNDING THAT 40 IT EXPERIENCES PURSUANT TO SUBSECTION U OF THIS SECTION. 41

U. Y. For the purposes of this section: 42 1. "Base year" means the complete school year in which voters of a 43

school district elected to join a joint technical education district. 44

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2. "Centralized campus" means a facility that is owned and operated by 1 a joint technical education district for the purpose of offering joint 2 technical education programs or joint technical education courses as defined 3 in section 15-391. 4

3. "Lease" means a written agreement in which the right of occupancy 5 or use of real property is conveyed from one person or entity to another 6 person or entity for a specified period of time. 7

4. "Leased centralized campus" means a facility that is leased and 8 operated by a joint technical education district for the purpose of offering 9 joint technical education programs or joint technical education courses as 10 defined in section 15-391. 11

5. "Satellite campus" means a facility that is owned or operated by a 12 school district for the purpose of offering joint technical education 13 programs or joint technical education courses as defined in section 15-391. 14

Sec. 4. Section 15-901, Arizona Revised Statutes, is amended to read: 15 15-901. Definitions 16 A. In this title, unless the context otherwise requires: 17 1. "Average daily membership" means the total enrollment of fractional 18

students and full-time students, minus withdrawals, of each school day 19 through the first one hundred days or two hundred days in session, as 20 applicable, for the current year. Withdrawals include students formally 21 withdrawn from schools and students absent for ten consecutive school days, 22 except for excused absences identified by the department of education. For 23 the purposes of this section, school districts and charter schools shall 24 report student absence data to the department of education at least once 25 every sixty days in session. For computation purposes, the effective date of 26 withdrawal shall be retroactive to the last day of actual attendance of the 27 student or excused absence. 28

(a) "Fractional student" means: 29 (i) For common schools, a preschool child who is enrolled in a program 30

for preschool children with disabilities of at least three hundred sixty 31 minutes each week that meets at least two hundred sixteen hours over the 32 minimum number of days or a kindergarten student who is at least five years 33 of age before January 1 of the school year and enrolled in a school 34 kindergarten program that meets at least three hundred fifty-six hours for a 35 one hundred eighty day school year, or the instructional hours prescribed in 36 this section. Lunch periods and recess periods may not be included as part 37 of the instructional hours unless the child's individualized education 38 program requires instruction during those periods and the specific reasons 39 for such instruction are fully documented. In computing the average daily 40 membership, preschool children with disabilities and kindergarten students 41 shall be counted as one-half of a full-time student. For common schools, a 42 part-time student is a student enrolled for less than the total time for a 43 full-time student as defined in this section. A part-time common school 44 student shall be counted as one-fourth, one-half or three-fourths of a 45

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full-time student if the student is enrolled in an instructional program that 1 is at least one-fourth, one-half or three-fourths of the time a full-time 2 student is enrolled as defined in subdivision (b) of this paragraph. 3

(ii) For high schools, a part-time student who is enrolled in less 4 than four subjects that count toward graduation as defined by the state board 5 of education, each of which, if taught each school day for the minimum number 6 of days required in a school year, would meet a minimum of one hundred 7 twenty-three hours a year, or the equivalent, in a recognized high school. 8 The average daily membership of a part-time high school student shall be 0.75 9 if the student is enrolled in an instructional program of three subjects that 10 meet at least five hundred forty hours for a one hundred eighty day school 11 year, or the instructional hours prescribed in this section. The average 12 daily membership of a part-time high school student shall be 0.5 if the 13 student is enrolled in an instructional program of two subjects that meet at 14 least three hundred sixty hours for a one hundred eighty day school year, or 15 the instructional hours prescribed in this section. The average daily 16 membership of a part-time high school student shall be 0.25 if the student is 17 enrolled in an instructional program of one subject that meets at least one 18 hundred eighty hours for a one hundred eighty day school year, or the 19 instructional hours prescribed in this section. 20

(b) "Full-time student" means: 21 (i) For common schools, a student who is at least six years of age 22

before January 1 of a school year, who has not graduated from the highest 23 grade taught in the school district and who is regularly enrolled in a course 24 of study required by the state board of education. First, second and third 25 grade students or ungraded group B children with disabilities who are at 26 least five, but under six, years of age by September 1 must be enrolled in an 27 instructional program that meets for a total of at least seven hundred twelve 28 hours for a one hundred eighty day school year, or the instructional hours 29 prescribed in this section. Fourth, fifth and sixth grade students must be 30 enrolled in an instructional program that meets for a total of at least eight 31 hundred ninety hours for a one hundred eighty day school year, or the 32 instructional hours prescribed in this section. Seventh and eighth grade 33 students must be enrolled in an instructional program that meets for at least 34 one thousand hours. Lunch periods and recess periods may not be included as 35 part of the instructional hours unless the student is a child with a 36 disability and the child's individualized education program requires 37 instruction during those periods and the specific reasons for such 38 instruction are fully documented. 39

(ii) For high schools, a student not graduated from the highest grade 40 taught in the school district and enrolled in at least an instructional 41 program of four or more subjects that count toward graduation as defined by 42 the state board of education, each of which, if taught each school day for 43 the minimum number of days required in a school year, would meet a minimum of 44 one hundred twenty-three hours a year, or the equivalent, that meets for a 45

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total of at least seven hundred twenty hours for a one hundred eighty day 1 school year, or the instructional hours prescribed in this section in a 2 recognized high school. A full-time student shall not be counted more than 3 once for computation of average daily membership. The average daily 4 membership of a full-time high school student shall be 1.0 if the student is 5 enrolled in at least four subjects that meet at least seven hundred twenty 6 hours for a one hundred eighty day school year, or the equivalent 7 instructional hours prescribed in this section. 8

(iii) If a child who has not reached five years of age before 9 September 1 of the current school year is admitted to kindergarten and 10 repeats kindergarten in the following school year, a school district or 11 charter school is not eligible to receive basic state aid on behalf of that 12 child during the child's second year of kindergarten. If a child who has not 13 reached five years of age before September 1 of the current school year is 14 admitted to kindergarten but does not remain enrolled, a school district or 15 charter school may receive a portion of basic state aid on behalf of that 16 child in the subsequent year. A school district or charter school may charge 17 tuition for any child who is ineligible for basic state aid pursuant to this 18 item. 19

(iv) Except as otherwise provided by law, for a full-time high school 20 student who is concurrently enrolled in two school districts or two charter 21 schools, the average daily membership shall not exceed 1.0. 22

(v) Except as otherwise provided by law, for any student who is 23 concurrently enrolled in a school district and a charter school, the average 24 daily membership shall be apportioned between the school district and the 25 charter school and shall not exceed 1.0. The apportionment shall be based on 26 the percentage of total time that the student is enrolled in or in attendance 27 at the school district and the charter school. 28

(vi) Except as otherwise provided by law, for any student who is 29 concurrently enrolled, pursuant to section 15-808, in a school district and 30 Arizona online instruction or a charter school and Arizona online 31 instruction, the average daily membership shall be apportioned between the 32 school district and Arizona online instruction or the charter school and 33 Arizona online instruction and shall not exceed 1.0. The apportionment shall 34 be based on the percentage of total time that the student is enrolled in or 35 in attendance at the school district and Arizona online instruction or the 36 charter school and Arizona online instruction. 37

(vii) For homebound or hospitalized, a student receiving at least four 38 hours of instruction per week. 39

2. "Budget year" means the fiscal year for which the school district 40 is budgeting and that immediately follows the current year. 41

3. "Common school district" means a political subdivision of this 42 state offering instruction to students in programs for preschool children 43 with disabilities and kindergarten programs and either: 44

(a) Grades one through eight. 45

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(b) Grades one through nine pursuant to section 15-447.01. 1 4. "Current year" means the fiscal year in which a school district is 2

operating. 3 5. "Daily attendance" means: 4 (a) For common schools, days in which a pupil: 5 (i) Of a kindergarten program or ungraded, but not group B children 6

with disabilities, and at least five, but under six, years of age by 7 September 1 attends at least three-quarters of the instructional time 8 scheduled for the day. If the total instruction time scheduled for the year 9 is at least three hundred fifty-six hours but is less than seven hundred 10 twelve hours, such attendance shall be counted as one-half day of attendance. 11 If the instructional time scheduled for the year is at least six hundred 12 ninety-two hours, "daily attendance" means days in which a pupil attends at 13 least one-half of the instructional time scheduled for the day. Such 14 attendance shall be counted as one-half day of attendance. 15

(ii) Of the first, second or third grades attends more than 16 three-quarters of the instructional time scheduled for the day. 17

(iii) Of the fourth, fifth or sixth grades attends more than 18 three-quarters of the instructional time scheduled for the day, except as 19 provided in section 15-797. 20

(iv) Of the seventh or eighth grades attends more than three-quarters 21 of the instructional time scheduled for the day, except as provided in 22 section 15-797. 23

(b) For common schools, the attendance of a pupil at three-quarters or 24 less of the instructional time scheduled for the day shall be counted as 25 follows, except as provided in section 15-797 and except that attendance for 26 a fractional student shall not exceed the pupil's fractional membership: 27

(i) If attendance for all pupils in the school is based on quarter 28 days, the attendance of a pupil shall be counted as one-fourth of a day's 29 attendance for each one-fourth of full-time instructional time attended. 30

(ii) If attendance for all pupils in the school is based on half days, 31 the attendance of at least three-quarters of the instructional time scheduled 32 for the day shall be counted as a full day's attendance and attendance at a 33 minimum of one-half but less than three-quarters of the instructional time 34 scheduled for the day equals one-half day of attendance. 35

(c) For common schools, the attendance of a preschool child with 36 disabilities shall be counted as one-fourth day's attendance for each 37 thirty-six minutes of attendance not including lunch periods and recess 38 periods, except as provided in paragraph 1, subdivision (a), item (i) of this 39 subsection for children with disabilities up to a maximum of three hundred 40 sixty minutes each week. 41

(d) For high schools, the attendance of a pupil shall not be counted 42 as a full day unless the pupil is actually and physically in attendance and 43 enrolled in and carrying four subjects, each of which, if taught each school 44 day for the minimum number of days required in a school year, would meet a 45

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minimum of one hundred twenty-three hours a year, or the equivalent, that 1 count toward graduation in a recognized high school except as provided in 2 section 15-797 and subdivision (e) of this paragraph. Attendance of a pupil 3 carrying less than the load prescribed shall be prorated. 4

(e) For high schools, the attendance of a pupil may be counted as 5 one-fourth of a day's attendance for each sixty minutes of instructional time 6 in a subject that counts toward graduation, except that attendance for a 7 pupil shall not exceed the pupil's full or fractional membership. 8

(f) For homebound or hospitalized, a full day of attendance may be 9 counted for each day during a week in which the student receives at least 10 four hours of instruction. 11

(g) For school districts that maintain school for an approved 12 year-round school year operation, attendance shall be based on a computation, 13 as prescribed by the superintendent of public instruction, of the one hundred 14 eighty days' equivalency or two hundred days' equivalency, as applicable, of 15 instructional time as approved by the superintendent of public instruction 16 during which each pupil is enrolled. 17

6. "Daily route mileage" means the sum of: 18 (a) The total number of miles driven daily by all buses of a school 19

district while transporting eligible students from their residence to the 20 school of attendance and from the school of attendance to their residence on 21 scheduled routes approved by the superintendent of public instruction. 22

(b) The total number of miles driven daily on routes approved by the 23 superintendent of public instruction for which a private party, a political 24 subdivision or a common or a contract carrier is reimbursed for bringing an 25 eligible student from the place of his residence to a school transportation 26 pickup point or to the school of attendance and from the school 27 transportation scheduled return point or from the school of attendance to his 28 residence. Daily route mileage includes the total number of miles necessary 29 to drive to transport eligible students from and to their residence as 30 provided in this paragraph. 31

7. "District support level" means the base support level plus the 32 transportation support level. 33

8. "Eligible students" means: 34 (a) Students who are transported by or for a school district and who 35

qualify as full-time students or fractional students, except students for 36 whom transportation is paid by another school district or a county school 37 superintendent, and: 38

(i) For common school students, whose place of actual residence within 39 the school district is more than one mile from the school facility of 40 attendance or students who are admitted pursuant to section 15-816.01 and who 41 meet the economic eligibility requirements established under the national 42 school lunch and child nutrition acts (42 United States Code sections 1751 43 through 1785) for free or reduced price lunches and whose actual place of 44

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residence outside the school district boundaries is more than one mile from 1 the school facility of attendance. 2

(ii) For high school students, whose place of actual residence within 3 the school district is more than one and one-half miles from the school 4 facility of attendance or students who are admitted pursuant to section 5 15-816.01 and who meet the economic eligibility requirements established 6 under the national school lunch and child nutrition acts (42 United States 7 Code sections 1751 through 1785) for free or reduced price lunches and whose 8 actual place of residence outside the school district boundaries is more than 9 one and one-half miles from the school facility of attendance. 10

(b) Kindergarten students, for purposes of computing the number of 11 eligible students under subdivision (a), item (i) of this paragraph, shall be 12 counted as full-time students, notwithstanding any other provision of law. 13

(c) Children with disabilities, as defined by section 15-761, who are 14 transported by or for the school district or who are admitted pursuant to 15 chapter 8, article 1.1 of this title and who qualify as full-time students or 16 fractional students regardless of location or residence within the school 17 district or children with disabilities whose transportation is required by 18 the pupil's individualized education program. 19

(d) Students whose residence is outside the school district and who 20 are transported within the school district on the same basis as students who 21 reside in the school district. 22

9. "Enrolled" or "enrollment" means when a pupil is currently 23 registered in the school district. 24

10. "GDP price deflator" means the average of the four implicit price 25 deflators for the gross domestic product reported by the United States 26 department of commerce for the four quarters of the calendar year. 27

11. "High school district" means a political subdivision of this state 28 offering instruction to students for grades nine through twelve or that 29 portion of the budget of a common school district that is allocated to 30 teaching high school subjects with permission of the state board of 31 education. 32

12. "Revenue control limit" means the base revenue control limit plus 33 the transportation revenue control limit. 34

13. "Student count" means: 35 (a) THROUGH JUNE 30, 2016, average daily membership as prescribed in 36

this subsection for the fiscal year before the current year, except that for 37 the purpose of budget preparation student count means average daily 38 membership as prescribed in this subsection for the current year. 39

(b) BEGINNING JULY 1, 2016, AVERAGE DAILY MEMBERSHIP AS PRESCRIBED IN 40 THIS SUBSECTION FOR THE CURRENT YEAR. 41

14. "Submit electronically" means submitted in a format and in a manner 42 prescribed by the department of education. 43

15. "Total bus mileage" means the total number of miles driven by all 44 buses of a school district during the school year. 45

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16. "Total students transported" means all eligible students 1 transported from their place of residence to a school transportation pickup 2 point or to the school of attendance and from the school of attendance or 3 from the school transportation scheduled return point to their place of 4 residence. 5

17. "Unified school district" means a political subdivision of the 6 state offering instruction to students in programs for preschool children 7 with disabilities and kindergarten programs and grades one through twelve. 8

B. In this title, unless the context otherwise requires: 9 1. "Base" means the revenue level per student count specified by the 10

legislature. 11 2. "Base level" means the following amounts plus the percentage 12

increases to the base level as provided in sections 15-902.04, 15-918.04, 13 15-919.04 and 15-952, except that if a school district or charter school is 14 eligible for an increase in the base level as provided in two or more of 15 these sections, the base level amount shall be calculated by compounding 16 rather than adding the sum of one plus the percentage of the increase from 17 those different sections: 18

(a) For fiscal year 2007-2008, three thousand two hundred twenty-six 19 dollars eighty-eight cents. 20

(b) For fiscal year 2008-2009, three thousand two hundred ninety-one 21 dollars forty-two cents. 22

(c) For fiscal years 2009-2010, 2010-2011, 2011-2012 and 2012-2013, 23 three thousand two hundred sixty-seven dollars seventy-two cents. 24

(d) For fiscal year 2013-2014, three thousand three hundred twenty-six 25 dollars fifty-four cents. 26

(e) For fiscal year 2014-2015, three thousand three hundred 27 seventy-three dollars eleven cents. 28

(f) FOR FISCAL YEAR 2015-2016, THREE THOUSAND FOUR HUNDRED TWENTY-SIX 29 DOLLARS SEVENTY-FOUR CENTS. 30

3. "Base revenue control limit" means the base revenue control limit 31 computed as provided in section 15-944. 32

4. "Base support level" means the base support level as provided in 33 section 15-943. 34

5. "Certified teacher" means a person who is certified as a teacher 35 pursuant to the rules adopted by the state board of education, who renders 36 direct and personal services to school children in the form of instruction 37 related to the school district's educational course of study and who is paid 38 from the maintenance and operation section of the budget. 39

6. "DD" means programs for children with developmental delays who are 40 at least three years of age but under ten years of age. A preschool child 41 who is categorized under this paragraph is not eligible to receive funding 42 pursuant to section 15-943, paragraph 2, subdivision (b). 43

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7. "ED, MIID, SLD, SLI and OHI" means programs for children with 1 emotional disabilities, mild intellectual disabilities, a specific learning 2 disability, a speech/language impairment and other health impairments. A 3 preschool child who is categorized as SLI under this paragraph is not 4 eligible to receive funding pursuant to section 15-943, paragraph 2, 5 subdivision (b). 6

8. "ED-P" means programs for children with emotional disabilities who 7 are enrolled in private special education programs as prescribed in section 8 15-765, subsection D, paragraph 1 or in an intensive school district program 9 as provided in section 15-765, subsection D, paragraph 2. 10

9. "ELL" means English learners who do not speak English or whose 11 native language is not English, who are not currently able to perform 12 ordinary classroom work in English and who are enrolled in an English 13 language education program pursuant to sections 15-751, 15-752 and 15-753. 14

10. "Full-time equivalent certified teacher" or "FTE certified teacher" 15 means for a certified teacher the following: 16

(a) If employed full time as defined in section 15-501, 1.00. 17 (b) If employed less than full time, multiply 1.00 by the percentage 18

of a full school day, or its equivalent, or a full class load, or its 19 equivalent, for which the teacher is employed as determined by the governing 20 board. 21

11. "Group A" means educational programs for career exploration, a 22 specific learning disability, an emotional disability, a mild intellectual 23 disability, remedial education, a speech/language impairment, developmental 24 delay, homebound, bilingual, other health impairments and gifted pupils. 25

12. "Group B" means educational improvements for pupils in kindergarten 26 programs and grades one through three, educational programs for autism, a 27 hearing impairment, a moderate intellectual disability, multiple 28 disabilities, multiple disabilities with severe sensory impairment, 29 orthopedic impairments, preschool severe delay, a severe intellectual 30 disability and emotional disabilities for school age pupils enrolled in 31 private special education programs or in school district programs for 32 children with severe disabilities or visual impairment and English learners 33 enrolled in a program to promote English language proficiency pursuant to 34 section 15-752. 35

13. "HI" means programs for pupils with hearing impairment. 36 14. "Homebound" or "hospitalized" means a pupil who is capable of 37

profiting from academic instruction but is unable to attend school due to 38 illness, disease, accident or other health conditions, who has been examined 39 by a competent medical doctor and who is certified by that doctor as being 40 unable to attend regular classes for a period of not less than three school 41 months or a pupil who is capable of profiting from academic instruction but 42 is unable to attend school regularly due to chronic or acute health problems, 43 who has been examined by a competent medical doctor and who is certified by 44 that doctor as being unable to attend regular classes for intermittent 45

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periods of time totaling three school months during a school year. The 1 medical certification shall state the general medical condition, such as 2 illness, disease or chronic health condition, that is the reason that the 3 pupil is unable to attend school. Homebound or hospitalized includes a 4 student who is unable to attend school for a period of less than three months 5 due to a pregnancy if a competent medical doctor, after an examination, 6 certifies that the student is unable to attend regular classes due to risk to 7 the pregnancy or to the student's health. 8

15. "K-3" means kindergarten programs and grades one through three. 9 16. "K-3 Reading" means reading programs for pupils in kindergarten 10

programs and grades one, two and three. 11 17. "MD-R, A-R and SID-R" means resource programs for pupils with 12

multiple disabilities, autism and severe intellectual disability. 13 18. "MD-SC, A-SC and SID-SC" means self-contained programs for pupils 14

with multiple disabilities, autism and severe intellectual disability. 15 19. "MD-SSI" means a program for pupils with multiple disabilities with 16

severe sensory impairment. 17 20. "MOID" means programs for pupils with moderate intellectual 18

disability. 19 21. "OI-R" means a resource program for pupils with orthopedic 20

impairments. 21 22. "OI-SC" means a self-contained program for pupils with orthopedic 22

impairments. 23 23. "PSD" means preschool programs for children with disabilities as 24

provided in section 15-771. 25 24. "P-SD" means programs for children who meet the definition of 26

preschool severe delay as provided in section 15-771. 27 25. "Qualifying tax rate" means the qualifying tax rate specified in 28

section 15-971 applied to the assessed valuation used for primary property 29 taxes. 30

26. "Small isolated school district" means a school district that meets 31 all of the following: 32

(a) Has a student count of fewer than six hundred in kindergarten 33 programs and grades one through eight or grades nine through twelve. 34

(b) Contains no school that is fewer than thirty miles by the most 35 reasonable route from another school, or, if road conditions and terrain make 36 the driving slow or hazardous, fifteen miles from another school that teaches 37 one or more of the same grades and is operated by another school district in 38 this state. 39

(c) Is designated as a small isolated school district by the 40 superintendent of public instruction. 41

27. "Small school district" means a school district that meets all of 42 the following: 43

(a) Has a student count of fewer than six hundred in kindergarten 44 programs and grades one through eight or grades nine through twelve. 45

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(b) Contains at least one school that is fewer than thirty miles by 1 the most reasonable route from another school that teaches one or more of the 2 same grades and is operated by another school district in this state. 3

(c) Is designated as a small school district by the superintendent of 4 public instruction. 5

28. "Transportation revenue control limit" means the transportation 6 revenue control limit computed as prescribed in section 15-946. 7

29. "Transportation support level" means the support level for pupil 8 transportation operating expenses as provided in section 15-945. 9

30. "VI" means programs for pupils with visual impairments. 10 31. "Voc. Ed." means career and technical education and vocational 11

education programs, as defined in section 15-781. 12 Sec. 5. Repeal 13 Section 15-917, Arizona Revised Statutes, is repealed. 14 Sec. 6. Section 15-945, Arizona Revised Statutes, is amended to read: 15 15-945. Transportation support level 16 A. The support level for to and from school for each school district 17

for the current year shall be computed as follows: 18 1. Determine the approved daily route mileage of the school district 19

for the fiscal year prior to the current year. 20 2. Multiply the figure obtained in paragraph 1 of this subsection by 21

one hundred eighty, or for a school district that elects to provide two 22 hundred days of instruction pursuant to section 15-902.04, multiply the 23 figure obtained in paragraph 1 of this subsection by two hundred. 24

3. Determine the number of eligible students transported in the fiscal 25 year prior to the current year. 26

4. Divide the amount determined in paragraph 1 of this subsection by 27 the amount determined in paragraph 3 of this subsection to determine the 28 approved daily route mileage per eligible student transported. 29

5. Determine the classification in column 1 of this paragraph for the 30 quotient determined in paragraph 4 of this subsection. Multiply the product 31 obtained in paragraph 2 of this subsection by the corresponding state support 32 level for each route mile as provided in column 2 of this paragraph. 33 Column 1 Column 2 34 Approved Daily Route State Support Level per 35 Mileage per Eligible Route Mile for 36 Student Transported Fiscal Year 2014-2015 2015-2016 37 0.5 or less 2.49 2.53 38 More than 0.5 through 1.0 2.04 2.07 39 More than 1.0 2.49 2.53 40

6. Add the amount spent during the prior fiscal year for bus tokens 41 and bus passes for students who qualify as eligible students as defined in 42 section 15-901. 43

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B. The support level for academic education, career and technical 1 education, vocational education and athletic trips for each school district 2 for the current year is computed as follows: 3

1. Determine the classification in column 1 of paragraph 2 of this 4 subsection for the quotient determined in subsection A, paragraph 4 of this 5 section. 6

2. Multiply the product obtained in subsection A, paragraph 5 of this 7 section by the corresponding state support level for academic education, 8 career and technical education, vocational education and athletic trips as 9 provided in column 2, 3 or 4 of this paragraph, whichever is appropriate for 10 the type of district. 11 Column 1 Column 2 Column 3 Column 4 12 Approved Daily Route 13 Mileage per Eligible District Type District Type District Type 14 Student Transported 02 or 03 04 05 15 0.5 or less 0.15 0.10 0.25 16 More than 0.5 through 1.0 0.15 0.10 0.25 17 More than 1.0 0.18 0.12 0.30 18 For the purposes of this paragraph, "district type 02" means a unified school 19 district or an accommodation school that offers instruction in grades nine 20 through twelve, "district type 03" means a common school district not within 21 a high school district, "district type 04" means a common school district 22 within a high school district or an accommodation school that does not offer 23 instruction in grades nine through twelve and "district type 05" means a high 24 school district. 25

C. The support level for extended school year services for pupils with 26 disabilities is computed as follows: 27

1. Determine the sum of the following: 28 (a) The total number of miles driven by all buses of a school district 29

while transporting eligible pupils with disabilities on scheduled routes from 30 their residence to the school of attendance and from the school of attendance 31 to their residence on routes for extended school year services in accordance 32 with section 15-881. 33

(b) The total number of miles driven on routes approved by the 34 superintendent of public instruction for which a private party, a political 35 subdivision or a common or a contract carrier is reimbursed for bringing an 36 eligible pupil with a disability from the place of the pupil's residence to a 37 school transportation pickup point or to the school facility of attendance 38 and from the school transportation scheduled return point or from the school 39 facility to the pupil's residence for extended school year services in 40 accordance with section 15-881. 41

2. Multiply the sum determined in paragraph 1 of this subsection by 42 the state support level for the district determined as provided in subsection 43 A, paragraph 5 of this section. 44

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D. The transportation support level for each school district for the 1 current year is the sum of the support level for to and from school as 2 determined in subsection A of this section, the support level for academic 3 education, career and technical education, vocational education and athletic 4 trips as determined in subsection B of this section and the support level for 5 extended school year services for pupils with disabilities as determined in 6 subsection C of this section. 7

E. The state support level for each approved route mile, as provided 8 in subsection A, paragraph 5 of this section, shall be adjusted by the growth 9 rate prescribed by law, subject to appropriation. 10

F. School districts must provide the odometer reading for each bus as 11 of the end of the current year and the total bus mileage during the current 12 year. 13

Sec. 7. Section 15-972, Arizona Revised Statutes, is amended to read: 14 15-972. State limitation on homeowner property taxes; 15

additional state aid to school districts; definitions 16 A. Notwithstanding section 15-971, there shall be additional state aid 17

for education computed for school districts as provided in subsection B of 18 this section. 19

B. The clerk of the board of supervisors shall compute such additional 20 state aid for education as follows: 21

1. For a high school district or for a common school district within a 22 high school district which THAT does not offer instruction in high school 23 subjects as provided in section 15-447: 24

(a) Determine the qualifying tax rate pursuant to section 41-1276 for 25 the school district. 26

(b) Determine the following percentage of the qualifying tax rate 27 determined in subdivision (a) of this paragraph: 28

(i) Thirty-five per cent PERCENT through December 31, 2005. 29 (ii) Thirty-six per cent PERCENT beginning from and after December 31, 30

2005 through December 31, 2006. 31 (iii) Thirty-seven per cent PERCENT beginning from and after December 32

31, 2006 through December 31, 2007. 33 (iv) Thirty-eight per cent PERCENT beginning from and after December 34

31, 2007 through December 31, 2008. 35 (v) Thirty-nine per cent PERCENT beginning from and after December 31, 36

2008 through December 31, 2009. 37 (vi) Forty per cent PERCENT beginning from and after December 31, 38

2009. 39 (vii) Such further adjustments of the percentage beginning from and 40

after December 31, 2012 as provided by law. 41 (c) Select the lesser of the amount determined in subdivision (b) of 42

this paragraph or forty per cent PERCENT of the primary property tax rate 43 that would be levied in lieu of the provisions of this section for the 44 district. 45

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(d) Multiply the rate selected in subdivision (c) of this paragraph as 1 a rate per one hundred dollars assessed valuation by the assessed valuation 2 used for primary property taxes of the residential property in the school 3 district. 4

2. For a unified school district, for a common school district not 5 within a high school district or for a common school district which THAT 6 offers instruction in high school subjects as provided in section 15-447: 7

(a) Determine the qualifying tax rate pursuant to section 41-1276 for 8 the school district. 9

(b) Determine the following percentage of the tax rate determined in 10 subdivision (a) of this paragraph: 11

(i) Thirty-five per cent PERCENT through December 31, 2005. 12 (ii) Thirty-six per cent PERCENT beginning from and after December 31, 13

2005 through December 31, 2006. 14 (iii) Thirty-seven per cent PERCENT beginning from and after December 15

31, 2006 through December 31, 2007. 16 (iv) Thirty-eight per cent PERCENT beginning from and after December 17

31, 2007 through December 31, 2008. 18 (v) Thirty-nine per cent PERCENT beginning from and after December 31, 19

2008 through December 31, 2009. 20 (vi) Forty per cent PERCENT beginning from and after December 31, 21

2009. 22 (vii) Such further adjustments of the percentage beginning from and 23

after December 31, 2012 as provided by law. 24 (c) Select the lesser of the amount determined in subdivision (b) of 25

this paragraph or forty per cent PERCENT of the primary property tax rate 26 that would be levied in lieu of the provisions of this section for the 27 district. 28

(d) Multiply the rate selected in subdivision (c) of this paragraph as 29 a rate per one hundred dollars assessed valuation by the assessed valuation 30 used for primary property taxes of the residential property in the district. 31

C. The clerk of the board of supervisors shall report to the 32 department of revenue not later than the Friday following the third Monday in 33 August of each year the amount by school district of additional state aid for 34 education and the data used for computing the amount as provided in 35 subsection B of this section. The department of revenue shall verify all of 36 the amounts and report to the county board of supervisors not later than 37 August 30 of each year the property tax rate or rates which THAT shall be 38 used for property tax reduction as provided in subsection E of this section. 39

D. The board of supervisors shall reduce the property tax rate or 40 rates that would be levied in lieu of the provisions of this section by the 41 school district or districts on the assessed valuation used for primary 42 property taxes of the residential property in the school district or 43 districts by the rate or rates selected in subsection B, paragraph 1, 44 subdivision (c) and paragraph 2, subdivision (c) of this section. The excess 45

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of the reduction in property taxes for a parcel of property resulting from 1 the reduction in the property tax rate pursuant to this subsection over the 2 amounts listed in this subsection shall be deducted from the amount of 3 additional state aid for education. The reduction in property taxes on a 4 parcel of property resulting from the reduction in the property tax rate 5 pursuant to this subsection shall not exceed the following amounts except as 6 provided in subsection I of this section: 7

1. Five hundred dollars through December 31, 2005. 8 2. Five hundred twenty dollars beginning from and after December 31, 9

2005 through December 31, 2006. 10 3. Five hundred forty dollars beginning from and after December 31, 11

2006 through December 31, 2007. 12 4. Five hundred sixty dollars beginning from and after December 31, 13

2007 through December 31, 2008. 14 5. Five hundred eighty dollars beginning from and after December 31, 15

2008 through December 31, 2009. 16 6. Six hundred dollars beginning from and after December 31, 2009. 17 E. Prior to the levying of taxes for school purposes the board of 18

supervisors shall determine whether the total primary property taxes to be 19 levied for all taxing jurisdictions on each parcel of residential property, 20 in lieu of the provisions of this subsection, violate article IX, section 18, 21 Constitution of Arizona. For those properties that qualify for property tax 22 exemptions pursuant to article IX, sections 2, 2.1 and 2.2, Constitution of 23 Arizona, eligibility for the credit is determined on the basis of the limited 24 property value that corresponds to the taxable assessed value after reduction 25 for the applicable exemption. If the board of supervisors determines that 26 such a situation exists, the board shall apply a credit against the primary 27 property taxes due from each such parcel in the amount in excess of article 28 IX, section 18, Constitution of Arizona. Such excess amounts shall also be 29 additional state aid for education for the school district or districts in 30 which such parcel of property is located. 31

F. The clerk of the board of supervisors shall report to the 32 department of revenue not later than September 5 of each year the amount by 33 school district of additional state aid for education and the data used for 34 computing the amount as provided in subsection B of this section. The 35 department of revenue shall verify all of the amounts and report to the board 36 of supervisors not later than September 10 of each year the property tax rate 37 which THAT shall be used for property tax reduction as provided in subsection 38 E of this section. 39

G. The clerk of the board of supervisors shall report to the 40 department of revenue not later than September 30 of each year in writing the 41 following: 42

1. The data processing specifications used in the calculations 43 provided for in subsections B and E of this section. 44

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2. At a minimum, copies of two actual tax bills for residential 1 property for each distinct tax area. 2

H. The department of revenue shall report to the state board of 3 education not later than October 12 of each year the amount by school 4 district of additional state aid for education as provided in this section. 5 The additional state aid for education provided in this section shall be 6 apportioned as provided in section 15-973. 7

I. If a parcel of property is owned by a cooperative apartment 8 corporation or is owned by the tenants of a cooperative apartment corporation 9 as tenants in common, the reduction in the property taxes prescribed in 10 subsection D of this section shall not exceed the amounts listed in 11 subsection D of this section for each owner-occupied housing unit on the 12 property. The assessed value used for determining the reduction in taxes for 13 the property is equal to the total assessed value of the property times the 14 ratio of the number of owner-occupied housing units to the total number of 15 housing units on the property. For the purposes of this subsection, 16 "cooperative apartment corporation" means a corporation: 17

1. Having only one class of outstanding stock. 18 2. All of the stockholders of which are entitled, solely by reason of 19

their ownership of stock in the corporation, to occupy for dwelling purposes 20 apartments in a building owned or leased by such corporation and who are not 21 entitled, either conditionally or unconditionally, except upon a complete or 22 partial liquidation of the corporation, to receive any distribution not out 23 of earnings and profits of the corporation. 24

3. Eighty per cent PERCENT or more of the gross income of which is 25 derived from tenant-stockholders. For the purposes of this paragraph, "gross 26 income" means gross income as defined by the United States internal revenue 27 code, as defined in section 43-105. 28

J. The total amount of state monies that may be spent in any fiscal 29 year for state aid for education in this section shall not exceed the amount 30 appropriated or authorized by section 35-173 for that purpose. This section 31 shall not be construed to impose a duty on an officer, agent or employee of 32 this state to discharge a responsibility or to create any right in a person 33 or group if the discharge or right would require an expenditure of state 34 monies in excess of the expenditure authorized by legislative appropriation 35 for that specific purpose. 36

K. NOTWITHSTANDING SUBSECTION E OF THIS SECTION, BEGINNING IN FISCAL 37 YEAR 2015-2016, THE MAXIMUM AMOUNT OF ADDITIONAL STATE AID FOR EDUCATION THAT 38 WILL BE FUNDED BY THIS STATE PURSUANT TO SUBSECTION E OF THIS SECTION SHALL 39 BE ONE MILLION DOLLARS PER COUNTY. FOR ANY COUNTY WITH A SCHOOL DISTRICT OR 40 DISTRICTS THAT COLLECTIVELY WOULD OTHERWISE RECEIVE MORE THAN ONE MILLION IN 41 ADDITIONAL STATE AID FOR EDUCATION PURSUANT TO SUBSECTION E OF THIS SECTION, 42 THE PROPERTY TAX OVERSIGHT COMMISSION ESTABLISHED BY SECTION 42-17002 SHALL 43 DETERMINE THE PROPORTION OF THE VIOLATION OF ARTICLE IX, SECTION 18, 44 CONSTITUTION OF ARIZONA, THAT IS ATTRIBUTABLE TO EACH TAXING JURISDICTION 45

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WITHIN THE AFFECTED SCHOOL DISTRICT OR DISTRICTS. BASED ON THOSE 1 PROPORTIONS, THE PROPERTY TAX OVERSIGHT COMMISSION SHALL DETERMINE AN AMOUNT 2 THAT EACH TAXING JURISDICTION WITHIN THE AFFECTED SCHOOL DISTRICT OR 3 DISTRICTS SHALL TRANSFER TO THE AFFECTED SCHOOL DISTRICT OR DISTRICTS DURING 4 THE FISCAL YEAR IN ORDER TO COMPENSATE THE AFFECTED SCHOOL DISTRICT OR 5 DISTRICTS FOR ITS PRO RATA SHARE OF THE REDUCTION IN ADDITIONAL STATE AID FOR 6 EDUCATION FUNDING REQUIRED BY THIS SUBSECTION. IN DETERMINING THE PROPORTION 7 OF THE VIOLATION OF ARTICLE IX, SECTION 18, CONSTITUTION OF ARIZONA, THAT IS 8 ATTRIBUTABLE TO EACH TAXING JURISDICTION WITHIN THE AFFECTED SCHOOL DISTRICT 9 OR DISTRICTS, THE PROPERTY TAX OVERSIGHT COMMISSION SHALL ASSUME A PROPORTION 10 OF ZERO FOR ANY TAXING JURISDICTION THAT HAS A TAX RATE FOR THE FISCAL YEAR 11 THAT IS EQUAL TO OR LESS THAN THE TAX RATE OF PEER JURISDICTIONS, AS 12 DETERMINED BY THE PROPERTY TAX OVERSIGHT COMMISSION. 13

K. L. For the purposes of this section: 14 1. "Owner" includes any purchaser under a contract of sale or under a 15

deed of trust. 16 2. "Residential property" includes owner-occupied real property and 17

improvements to the property and owner-occupied mobile homes that are used as 18 the owner's primary residence and classified as class three property pursuant 19 to section 42-12003. 20

Sec. 8. Section 15-2002, Arizona Revised Statutes, is amended to read: 21 15-2002. Powers and duties; executive director; staffing; 22

report 23 A. The school facilities board shall: 24 1. Make assessments of school facilities and equipment deficiencies 25

and approve the distribution of grants as appropriate. 26 2. Maintain a database of school facilities to administer the building 27

renewal grant fund and new school facilities formula. The facilities listed 28 in the database must include all buildings that are owned by school 29 districts. The school facilities board shall ensure that the database is 30 updated on at least an annual basis. Each school district shall report to 31 the school facilities board no later than September 1 of each year 32 information as required by the school facilities board for the administration 33 of the building renewal grant fund and computation of new school facilities 34 formula distributions, including the nature and cost of major repairs, 35 renovations or physical improvements to or replacement of building systems or 36 equipment that were made in the previous year and that were paid for either 37 with local monies or monies provided by the school facilities board from the 38 building renewal grant fund. Each school district shall report any school or 39 school buildings that have been closed, that have been leased to another 40 entity or that operate as a charter school. The school facilities board may 41 review or audit the information, or both, to confirm the information 42 submitted by a school district. Notwithstanding any other provision of this 43 chapter, if a school district converts space that is listed in the database 44 maintained pursuant to this paragraph to space that will be used for 45

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administrative purposes, the school district is responsible for any costs 1 associated with the conversion, maintenance and replacement of that space. 2 If a building is significantly upgraded or remodeled, the school facilities 3 BOARD shall adjust the age of that school facility in the database as 4 follows: 5

(a) Determine the building capacity value as follows: 6 (i) Multiply the student capacity of the building by the per pupil 7

square foot capacity established by section 15-2041. 8 (ii) Multiply the product determined in item (i) of this subdivision 9

by the cost per square foot established by section 15-2041. 10 (b) Divide the cost of the renovation by the building capacity value 11

determined in subdivision (a) of this paragraph. 12 (c) Multiply the quotient determined in subdivision (b) of this 13

paragraph by the currently listed age of the building in the database. 14 (d) Subtract the product determined in subdivision (c) of this 15

paragraph from the currently listed age of the building in the database, 16 rounded to the nearest whole number. If the result is a negative number, use 17 zero. 18

3. Inspect school buildings at least once every five years to ensure 19 compliance with the building adequacy standards prescribed in section 15-2011 20 and routine preventative maintenance guidelines as prescribed in this section 21 with respect to construction of new buildings and maintenance of existing 22 buildings. The school facilities board shall randomly select twenty school 23 districts every thirty months and inspect them pursuant to this paragraph. 24

4. Review and approve student population projections submitted by 25 school districts to determine to what extent school districts are entitled to 26 monies to construct new facilities pursuant to section 15-2041. The board 27 shall make a final determination within six months of the receipt of an 28 application by a school district for monies from the new school facilities 29 fund. 30

5. Certify that plans for new school facilities meet the building 31 adequacy standards prescribed in section 15-2011. 32

6. Develop prototypical elementary and high school designs. The board 33 shall review the design differences between the schools with the highest 34 academic productivity scores and the schools with the lowest academic 35 productivity scores. The board shall also review the results of a valid and 36 reliable survey of parent quality rating in the highest performing schools 37 and the lowest performing schools in this state. The survey of parent 38 quality rating shall be administered by the department of education. The 39 board shall consider the design elements of the schools with the highest 40 academic productivity scores and parent quality ratings in the development of 41 elementary and high school designs. The board shall develop separate school 42 designs for elementary, middle and high schools with varying pupil 43 capacities. 44

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7. Develop application forms, reporting forms and procedures to carry 1 out the requirements of this article. 2

8. Review and approve or reject requests submitted by school districts 3 to take actions pursuant to section 15-341, subsection G. 4

9. Submit electronically an annual report on or before December 15 to 5 the speaker of the house of representatives, the president of the senate, the 6 superintendent of public instruction, the secretary of state and the governor 7 that includes the following information: 8

(a) A detailed description of the amount of monies distributed by the 9 school facilities board in the previous fiscal year. 10

(b) A list of each capital project that received monies from the 11 school facilities board during the previous fiscal year, a brief description 12 of each project that was funded and a summary of the board's reasons for the 13 distribution of monies for the project. 14

(c) A summary of the findings and conclusions of the building 15 maintenance inspections conducted pursuant to this article during the 16 previous fiscal year. 17

(d) A summary of the findings of common design elements and 18 characteristics of the highest performing schools and the lowest performing 19 schools based on academic productivity, including the results of the parent 20 quality rating survey. For the purposes of this subdivision, "academic 21 productivity" means academic year advancement per calendar year as measured 22 with student-level data using the statewide nationally standardized 23 norm-referenced achievement test. 24

10. On or before December 1 of each year, report electronically to the 25 joint committee on capital review the amounts necessary to fulfill the 26 requirements of sections 15-2022 and 15-2041 for the following three fiscal 27 years. In developing the amounts necessary for this report, the school 28 facilities board shall use the most recent average daily membership data 29 available. On request from the board, the department of education shall make 30 available the most recent average daily membership data for use in 31 calculating the amounts necessary to fulfill the requirements of section 32 15-2041 for the following three fiscal years. The board shall provide copies 33 of the report to the president of the senate, the speaker of the house of 34 representatives and the governor. 35

11. Adopt minimum school facility adequacy guidelines to provide the 36 minimum quality and quantity of school buildings and the facilities and 37 equipment necessary and appropriate to enable pupils to achieve the 38 educational goals of the Arizona state schools for the deaf and the blind. 39 The school facilities board shall establish minimum school facility adequacy 40 guidelines applicable to the Arizona state schools for the deaf and the 41 blind. 42

12. In each even-numbered year, report electronically to the joint 43 committee on capital review the amounts necessary to fulfill the requirements 44 of section 15-2041 for the Arizona state schools for the deaf and the blind 45

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for the following two fiscal years. The Arizona state schools for the deaf 1 and the blind shall incorporate the findings of the report in any request for 2 new school facilities monies. Any monies provided to the Arizona state 3 schools for the deaf and the blind for new school facilities are subject to 4 legislative appropriation. 5

13. On or before June 15 of each year, submit electronically detailed 6 information regarding demographic assumptions, a proposed construction 7 schedule and new school construction cost estimates for individual projects 8 approved in the current fiscal year and expected project approvals for the 9 upcoming fiscal year to the joint committee on capital review for its review. 10 A copy of the report shall also be submitted electronically to the governor's 11 office of strategic planning and budgeting. The joint legislative budget 12 committee staff, the governor's office of strategic planning and budgeting 13 staff and the school facilities board staff shall agree on the format of the 14 report. 15

14. Every two years, provide school districts with information on 16 improving and maintaining the indoor environmental quality in school 17 buildings. 18

15. ON OR BEFORE DECEMBER 31 OF EACH YEAR, REPORT TO THE JOINT 19 LEGISLATIVE BUDGET COMMITTEE ON ALL CLASS B BOND APPROVALS BY SCHOOL 20 DISTRICTS IN THAT YEAR. EACH SCHOOL DISTRICT SHALL REPORT TO THE SCHOOL 21 FACILITIES BOARD ON OR BEFORE DECEMBER 1 OF EACH YEAR INFORMATION REQUIRED BY 22 THE SCHOOL FACILITIES BOARD FOR THE REPORT PRESCRIBED IN THIS PARAGRAPH. 23

B. The school facilities board may contract for the following services 24 in compliance with the procurement practices prescribed in title 41, 25 chapter 23: 26

1. Private services. 27 2. Construction project management services. 28 3. Assessments for school buildings to determine if the buildings have 29

outlived their useful life pursuant to section 15-2041, subsection G. 30 4. Services related to land acquisition and development of a school 31

site. 32 C. The governor shall appoint an executive director of the school 33

facilities board pursuant to section 38-211. The executive director is 34 eligible to receive compensation as determined pursuant to section 38-611 and 35 may hire and fire necessary staff subject to title 41, chapter 4, article 4 36 and as approved by the legislature in the budget. The executive director 37 shall have demonstrated competency in school finance, facilities design or 38 facilities management, either in private business or government service. The 39 executive director serves at the pleasure of the governor. The staff of the 40 school facilities board is exempt from title 41, chapter 4, articles 5 and 6. 41 The executive director: 42

1. Shall analyze applications for monies submitted to the board by 43 school districts. 44

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2. Shall assist the board in developing forms and procedures for the 1 distribution and review of applications and the distribution of monies to 2 school districts. 3

3. May review or audit, or both, the expenditure of monies by a school 4 district for deficiencies corrections and new school facilities. 5

4. Shall assist the board in the preparation of the board's annual 6 report. 7

5. Shall research and provide reports on issues of general interest to 8 the board. 9

6. May aid school districts in the development of reasonable and 10 cost-effective school designs in order to avoid statewide duplicated efforts 11 and unwarranted expenditures in the area of school design. 12

7. May assist school districts in facilitating the development of 13 multijurisdictional facilities. 14

8. Shall assist the board in any other appropriate matter or method as 15 directed by the members of the board. 16

9. Shall establish procedures to ensure compliance with the notice and 17 hearing requirements prescribed in section 15-905. The notice and hearing 18 procedures adopted by the board shall include the requirement, with respect 19 to the board's consideration of any application filed after July 1, 2001 or 20 after December 31 of the year in which the property becomes territory in the 21 vicinity of a military airport or ancillary military facility as defined in 22 section 28-8461 for monies to fund the construction of new school facilities 23 proposed to be located in territory in the vicinity of a military airport or 24 ancillary military facility, that the military airport receive notification 25 of the application by first class mail at least thirty days before any 26 hearing concerning the application. 27

10. May expedite any request for monies in which the local match was 28 not obtained for a project that received preliminary approval by the state 29 board for school capital facilities. 30

11. Shall expedite any request for monies in which the school district 31 governing board submits an application that shows an immediate need for a new 32 school facility. 33

12. Shall make a determination as to administrative completion within 34 one month after the receipt of an application by a school district for monies 35 from the new school facilities fund. 36

13. Shall provide technical support to school districts as requested by 37 school districts in connection with the construction of new school facilities 38 and the maintenance of existing school facilities and may contract directly 39 with construction project managers pursuant to subsection B of this section. 40 This paragraph does not restrict a school district from contracting with a 41 construction project manager using district or state resources. 42

D. When appropriate, the school facilities board shall review and use 43 the statewide school facilities inventory and needs assessment conducted by 44 the joint committee on capital review and issued in July, 1995. 45

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E. The school facilities board shall contract with one or more private 1 building inspectors to complete an initial assessment of school facilities 2 and equipment and shall inspect each school building in this state at least 3 once every five years to ensure compliance with section 15-2011. A copy of 4 the inspection report, together with any recommendations for building 5 maintenance, shall be provided to the school facilities board and the 6 governing board of the school district. 7

F. The school facilities board may consider appropriate combinations 8 of facilities or uses in making assessments of and curing deficiencies 9 pursuant to subsection A, paragraph 1 of this section and in certifying plans 10 for new school facilities pursuant to subsection A, paragraph 5 of this 11 section. 12

G. The board shall not award any monies to fund new facilities that 13 are financed by class A bonds that are issued by the school district. 14

H. The board shall not distribute monies to a school district for 15 replacement or repair of facilities if the costs associated with the 16 replacement or repair are covered by insurance or a performance or payment 17 bond. 18

I. The board may contract for construction services and materials that 19 are necessary to correct existing deficiencies in school district facilities. 20 The board may procure the construction services necessary pursuant to this 21 subsection by any method, including construction-manager-at-risk, 22 design-build, design-bid-build or job-order-contracting as provided by title 23 41, chapter 23. The construction planning and services performed pursuant to 24 this subsection are exempt from section 41-791.01. 25

J. The school facilities board may enter into agreements with school 26 districts to allow school facilities board staff and contractors access to 27 school property for the purposes of performing the construction services 28 necessary pursuant to subsection I of this section. 29

K. Each school district shall develop routine preventative maintenance 30 guidelines for its facilities. The guidelines shall include plumbing 31 systems, electrical systems, heating, ventilation and air conditioning 32 systems, special equipment and other systems and for roofing systems shall 33 recommend visual inspections performed by district staff for signs of 34 structural stress and weakness. The guidelines shall be submitted to the 35 school facilities board for review and approval. If on inspection by the 36 school facilities board it is determined that a school district facility was 37 inadequately maintained pursuant to the school district's routine 38 preventative maintenance guidelines, the school district shall return the 39 building to compliance with the school district's routine preventative 40 maintenance guidelines. 41

L. The school facilities board may temporarily transfer monies between 42 the capital reserve fund established by section 15-2003, the emergency 43 deficiencies correction fund established by section 15-2022 and the new 44

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school facilities fund established by section 15-2041 if all of the following 1 conditions are met: 2

1. The transfer is necessary to avoid a temporary shortfall in the 3 fund into which the monies are transferred. 4

2. The transferred monies are restored to the fund where the monies 5 originated as soon as practicable after the temporary shortfall in the other 6 fund has been addressed. 7

3. The school facilities board reports to the joint committee on 8 capital review the amount of and the reason for any monies transferred. 9

M. After notifying each school district, and if a written objection 10 from the school district is not received by the school facilities board 11 within thirty days of the notification, the school facilities board may 12 access public utility company records of power, water, natural gas, telephone 13 and broadband usage to assemble consistent and accurate data on utility 14 consumption at school facilities to determine the effectiveness of facility 15 design, operation and maintenance measures intended to reduce energy and 16 water consumption and costs. Any public utility that provides service to a 17 school district in this state shall provide the data requested by the school 18 facilities board pursuant to this subsection. 19

N. The school facilities board shall not require a common school 20 district that provides instruction to pupils in grade nine to obtain approval 21 from the school facilities board to reconfigure its school facilities. A 22 common school district that provides instruction to pupils in grade nine is 23 not entitled to additional monies from the school facilities board for 24 facilities to educate pupils in grade nine. 25

Sec. 9. Title 15, chapter 16, article 5, Arizona Revised Statutes, is 26 amended by adding section 15-2042, to read: 27

15-2042. Access our best public schools fund 28 THE ACCESS OUR BEST PUBLIC SCHOOLS FUND IS ESTABLISHED CONSISTING OF 29

MONIES APPROPRIATED BY THE LEGISLATURE AND GRANTS, GIFTS, DEVISES AND 30 DONATIONS FROM ANY PUBLIC OR PRIVATE SOURCE. THE SCHOOL FACILITIES BOARD 31 SHALL ADMINISTER THE FUND. MONIES IN THE FUND ARE SUBJECT TO LEGISLATIVE 32 APPROPRIATION AND SHALL BE AVAILABLE TO PUBLIC SCHOOLS THAT ARE MEMBERS OF 33 THE ARIZONA PUBLIC SCHOOL ACHIEVEMENT DISTRICT TO CONSTRUCT NEW SCHOOL 34 FACILITIES OR TO EXPAND EXISTING SCHOOL FACILITIES, EXCEPT THAT ANY GRANTS, 35 GIFTS, DEVISES AND DONATIONS THAT ARE DEPOSITED INTO THE FUND ARE 36 CONTINUOUSLY APPROPRIATED. AT LEAST FIFTY PERCENT OF THE PROJECTS THAT 37 RECEIVE MONIES FROM THE FUND SHALL BE IN LOW SOCIOECONOMIC AREAS. 38

Sec. 10. Deposits in the education learning and accountability 39 fund 40

On or before December 31, 2015, each community college district shall 41 transmit six dollars per full-time student equivalent according to the most 42 recent audit and each university under the jurisdiction of the Arizona board 43 of regents shall transmit six dollars per actual university full-time 44 equivalent student to the department of education for deposit in the 45

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education learning and accountability fund established by section 15-249.02, 1 Arizona Revised Statutes. 2

Sec. 11. District additional assistance for school districts; 3 reduction for fiscal year 2015-2016; classroom 4 spending 5

A. For fiscal year 2015-2016, the department of education shall reduce 6 by $352,442,700 the amount of basic state aid that otherwise would be 7 apportioned to school districts statewide for fiscal year 2015-2016 for 8 district additional assistance prescribed in section 15-961, Arizona Revised 9 Statutes, and shall reduce school district budget limits accordingly. 10

B. For fiscal year 2015-2016, the department of education shall reduce 11 district additional assistance for a school district that is not eligible to 12 receive basic state aid funding for fiscal year 2015-2016 by the amount that 13 its district additional assistance would be reduced pursuant to subsection A 14 of this section if the district were eligible to receive basic state aid 15 funding for fiscal year 2015-2016 and shall reduce the school district's 16 budget limits accordingly. 17

C. The governing board of a school district that has been assigned a 18 letter grade of A or B, or an equivalent successor classification, pursuant 19 to section 15-241, Arizona Revised Statutes, shall hold a public meeting to 20 discuss the school district's plan for proposed reductions pursuant to this 21 section. The governing board shall include the percentage of classroom 22 spending in the school district's adopted budget on the page of the budget 23 that the governing board members sign. 24

D. The governing board of a school district that has been assigned a 25 letter grade of C, D or F, or an equivalent successor classification, 26 pursuant to section 15-241, Arizona Revised Statutes, shall hold a public 27 meeting to present the school district's plan for proposed reductions 28 pursuant to this section. Within thirty days after that public meeting is 29 held, the community may submit comments and recommendations to the governing 30 board. The governing board shall consider the comments and recommendations 31 of the community at a public meeting. The governing board shall include the 32 percentage of classroom spending in the school district's adopted budget on 33 the page of the budget that the governing board members sign. 34

E. It is the intent of the governor and the legislature that school 35 districts increase the total percentage of classroom spending over the 36 previous year's percentages in the combined categories of instruction, 37 student support and instructional support as defined by the auditor general. 38

Sec. 12. K-12 formula reductions; small districts; maximum 39 Notwithstanding any other law, the sum of district additional 40

assistance reductions in fiscal year 2015-2016 for school districts with a 41 student count of fewer than 1,100 pupils may not exceed $5,000,000. 42

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Sec. 13. Additional assistance funding for charter schools; 1 reduction for fiscal year 2015-2016; nonclassroom 2 spending 3

A. The department of education shall reduce by $18,656,000 the amount 4 of charter additional assistance funding that otherwise would be apportioned 5 to charter schools statewide for fiscal year 2015-2016 pursuant to section 6 15-185, subsection B, paragraph 4, Arizona Revised Statutes, as amended by 7 this act, and shall reduce school district budget limits accordingly. The 8 funding reduction required under this section shall be made on a proportional 9 basis based on the charter additional assistance funding that each charter 10 school in the state would have received for fiscal year 2015-2016 without the 11 prescribed reduction. 12

B. For fiscal year 2015-2016, the department of education shall reduce 13 charter additional assistance funding for a school district that is not 14 eligible to receive basic state aid funding for fiscal year 2015-2016 by the 15 amount that its charter additional assistance funding would be reduced 16 pursuant to subsection A of this section if the school district were eligible 17 to receive basic state aid funding for fiscal year 2015-2016 and shall reduce 18 the school district's budget limits accordingly. 19

Sec. 14. Pilot program on school emergency readiness; report; 20 delayed repeal 21

A. The $3,646,400 state general fund appropriation to the department 22 of education for the school safety program for fiscal year 2015-2016 in the 23 general appropriations act includes $100,000 for a pilot program on school 24 emergency readiness. 25

B. On or before September 30, 2015, school districts shall submit 26 applications to the department of education to participate in the pilot 27 program. 28

C. On or before November 30, 2015, the department of education shall 29 select three school districts to participate in the pilot program. The 30 selected school districts shall collectively consist of no more than 31 thirty-one individual school sites and shall include: 32

1. One school district that is located in a county with a population 33 of eight hundred thousand persons or more according to the 2010 United States 34 decennial census. 35

2. One school district that is located in a county with a population 36 of one hundred thousand persons or more but less than eight hundred thousand 37 persons according to the 2010 United States decennial census. 38

3. One school district that is located in a county with a population 39 of less than one hundred thousand persons according to the 2010 United States 40 decennial census. 41

D. School districts that are selected to participate in the pilot 42 program shall be provided and use a readiness and emergency management 43 program that incorporates the following: 44

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1. Education-specific emergency management software. All plans and 1 critical emergency readiness information, including contacts, floor plans and 2 critical equipment photos and locations, shall be accessible online and 3 off-line via mobile device applications. The software used in the pilot 4 program shall comply with the national emergency information management 5 system adopted by the federal emergency management agency. 6

2. Training of teachers and administrators in the readiness and 7 emergency management program. 8

3. The development, implementation and maintenance of a comprehensive 9 crisis plan for participating school districts and their teachers and 10 administrators. 11

E. On or before November 1, 2016, the department of education shall 12 submit to the governor, the president of the senate and the speaker of the 13 house of representatives a report that summarizes the results of the pilot 14 program. The department of education shall provide a copy of the report to 15 the secretary of state. 16

F. This section is repealed from and after December 31, 2016. 17 Sec. 15. Joint technical education district equalization 18

funding; fiscal year 2015-2016 19 Notwithstanding section 15-393, Arizona Revised Statutes, or any other 20

law, the department of education shall fund state aid for joint technical 21 education districts with a student count of more than two thousand students 22 for fiscal year 2015-2016 at ninety-five and one-half percent of the amount 23 that otherwise would be provided by law and shall reduce its budget limits 24 accordingly. 25

Sec. 16. School facilities board; refinancing or refunding 26 agreement; review 27

A. Notwithstanding section 15-2004, subsection L, section 15-2005, 28 subsection L, and section 15-2006, Arizona Revised Statutes, the school 29 facilities board may enter into a refinancing or refunding agreement in 30 fiscal year 2015-2016 that will reduce the school facilities board's lease 31 purchase payments by a combined total of at least $7,000,000 in fiscal years 32 2015-2016 through 2023-2024. The school facilities board's lease purchase 33 payment reductions may not vary by more than $1,000,000 in any single fiscal 34 year during this period. 35

B. Before the school facilities board enters into a refinancing or 36 refunding agreement pursuant to subsection A of this section, the agreement's 37 proposed terms shall be submitted for review to the joint committee on 38 capital review. 39

Sec. 17. District-sponsored charter schools; intent; phaseout 40 A. It is the intent of the legislature that district-sponsored charter 41

schools be phased out by fiscal year 2016-2017. 42 B. Notwithstanding any other law, for fiscal year 2015-2016, the 43

department of education shall fund incremental monies for charter schools 44 that are sponsored by school districts at fifty percent of the level of 45

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incremental monies that would otherwise be provided to those charter schools 1 and shall reduce budget limits accordingly. For the purposes of this 2 subsection, "incremental monies" means the additional funding a charter 3 school that is sponsored by a school district receives under the state 4 equalization funding formula for schools in excess of the amount that would 5 be received under that formula if the school was operated by a school 6 district but was not a charter school operated by the school district, 7 including incremental monies received through local property taxes for a 8 school district that is not eligible to receive state aid. 9

Sec. 18. Current-year funding; notice; report 10 On or before December 15, 2015, the department of education shall 11

notify school districts how the department plans to implement current-year 12 average daily membership funding for school districts in fiscal year 13 2016-2017 under this act, including an explanation of the process, the 14 required forms and the technological requirements needed. The department 15 shall report the estimated fiscal impact on individual school districts for 16 fiscal year 2016-2017, based on the most recently available data, to the 17 governor, the president of the senate, the speaker of the house of 18 representatives, the director of the joint legislative budget committee and 19 the director of the governor's office of strategic planning and budgeting. 20